How to Optimize Your Digital Treasury

Digital Treasury is the latest trend that’s slated to transform corporate treasury departments — and organizations as a whole.

A digital treasury is one that uses technology to streamline manual and repetitive tasks and create real-time transparency of an organization’s financial information. As organizations continue to digitally optimize, people, data and processes become even more connected by complementary technologies, creating a true digital ecosystem.

Spreadsheets carried the torch for many years in treasury. Manual processes such as cash positioning, in-house investment portfolio tracking and foreign currency trades were tracked, accounted for and disclosed using spreadsheets. But today, software companies have innovative products that perform these same tasks faster and smarter.

Digital treasury is about moving beyond legacy treasury workstations — and optimizing the technological offerings available to treasurers in a cost effective, flexible and more nimble way. The digital treasury we’re talking about here is an app-based treasury process. All-in-one workstations are ridged, less specialized and have extensive, costly implementations. App-based solutions are innovative, specialized software services that are quick to implement, 100 percent in the cloud and can easily integrate, optimizing your technology stack.

Benefits of Digital Treasury

Finance today has become increasingly mobile. Whether it’s a cell phone used to transfer funds or a tablet used to trade derivatives, business is getting done on-the-go.

A digital treasury provides this flexible work environment. It allows business to take place anywhere there is an internet connection, and it allows for vendors to move into and out of an ecosystem based on performance. No longer is treasury “stuck” with a dinosaur all-in-one system that’s expensive to change and inflexible.

Also, digital treasury has led to the creation of SaaS offerings with built-in role-based controls and compliance, speeding up audits, reporting and SOX 404 control maintenance. Plus, cloud-based solutions mean that on-site servers and I.T. firewall concerns are reduced or eliminated entirely.

One of the most common benefits of a digital treasury is the automation of routine and repetitive tasks. By setting up a technology ecosystem, companies no longer have to manually process low-value, high-volume transactions.

For example, instead of pulling foreign currency exposures by entity, aggregating them and consolidating the information for balance sheet hedging, exposure management software can automate the entire process for you. This frees up treasury professionals to make more strategic business decisions out of real-time information, instead of spending their days on data management and mining. Organizations that use real-time data to analyze trends and make decisions find much more success than those who use one-month old exposure data.

The Digital Ecosystem

Treasury is moving from workstations that promise to be “all things treasury” to an application (or app) ecosystem. This digital ecosystem uses the best technology for a specific task in a flexible and nimble way, instead of leaving treasurers stuck within an inflexible all-in-one TMS.

For example, foreign currency trading portals and special hedge accounting applications can now seamlessly integrate with Cash Management and ERP systems to optimize their processes and form a single flow of information.

In the past, a comprehensive treasury workstation was expensive to implement, often customized and too ridged to change. Vendors were few. This digital treasury changes the traditional workstation concept.

Optimizing the Digital Ecosystem

Digital treasury can be optimized by moving away from large static workstations and, instead, picking and connecting the best solutions for your firm and specific tasks.

This is because niche software can focus 100 percent of their expertise, energy and resources on being the best at a specific area. On the other hand, large workstations need to try to be good at everything, so some areas may be left behind.

Would you rather Netflix focus 100 percent on being the best at streaming TV and movie content to your devices or try to be Pandora, Twitter and Uber all-in-one?

Would you rather Sonos improve its technology for connecting speakers or spread itself thin on ten other ventures?

Clients benefit when service providers are focused on being the best at what they do. Treasury is too broad of a category to say “we are the best at Treasury.” Why not pull together the best softwares for every specific aspect of Treasury, instead?

Today’s technology allows you to connect systems through the cloud to move routine tasks out of the department for good. Treasury teams can access digital solutions anywhere an internet connection is found and shift their focus to making more informed, strategic business decisions.

The variety of treasury technology solutions is expanding, and the ability to connect them has never been easier. When you optimize a digital treasury, your organization experiences reduced switching costs, best of breed solutions and minimal time lost managing data. Digital treasuries can be updated as needed for changing business conditions or as your organization expands its treasury functions — such as launching a new debt offering or adopting a cash flow hedge accounting strategy.

Automate your treasury tasks so your team can shift their focus to making informed, strategic business decisions. Learn more about Capella FX, a valuable tool to include in your digital treasury.